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THE SITUATION ROOM

Cease-Fire Failure; Interview with Mark Regev; Interview with Osama Hamdan; Crisis in the Middle East; Interview with Martin Indyk; Interview with Tony Blair; Severe Weather Threat in U.S. East Coast

Aired July 15, 2014 - 17:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


WOLF BLITZER, HOST: Happening now, breaking news here in Israel, where the Security Cabinet is in an emergency meeting right now.

This is a SITUATION ROOM special report, Brink of War.

Cease-fire failures -- efforts to halt the fighting between Israel and Hamas collapse and the air wars raging once again.

Rocket barrage -- Hamas respond to calls for a truce by firing dozens more rockets at Israel, many intercepted by Israel's Iron Dome.

Weather warning -- 30 million people from New York to Washington are now in the path of severe thunderstorms that could trigger flooding and even tornadoes.

We want to welcome our viewers in the United States and around the world.

I'm Wolf Blitzer in Jerusalem.

You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: And we're following the breaking news. An emergency meeting of the Israeli Security Cabinet happening right now. And it's midnight here in Israel. And the Israeli Defense Forces have just announced it's sending messages to residents of Northern Gaza to leave their homes for their own safety.

All this comes as the death toll from eight days of fighting between Israel and Hamas now approaching 200. And with the collapse of a cease-fire today, there is little hope this air war will let up any time soon.

Hamas rejected the Egyptian plan outright.

And Israel says rocket fire from Gaza continued even as Israeli Defense Forces paused for air strikes for six hours.

Officials in Gaza are reporting new deaths and now Israel is confirming its first fatality of this conflict.

We're covering all angles this hour with our correspondences across the region and our guests, including spokesmen for Hamas and for the Israeli prime minister.

But first, the latest on the fighting.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Israel's offensive in Gaza is now back in full force after a cease-fire effort fell apart. And now, for the first time in this round of clashes, an Israeli has been killed. A volunteer was hit by a mortar shell while delivering food to soldiers at the Erez border crossing, where I was just the day before and had to take cover.

(on camera): We just heard shots.

(voice-over): The rocket barrage on Israel never stopped, even though the Israelis held off on air strikes for about six hours, hoping to give the Egypt-backed truce proposal a chance. During that, time, Israel says 47 rockets were fired from Gaza. We were on alert for incoming rockets, as I interviewed Prime Minister Netanyahu's spokesman on a hilltop in Jaffa overlooking Tel Aviv. He made it clear to me that Israel's patience had run out.

MARK REGEV, SPOKESMAN, ISRAELI PRIME MINISTER BENJAMIN NETANYAHU: Israel reserves the right -- and I believe we will have strong international support -- for acting to protect our people.

BLITZER: The military wing of Hamas rejected the cease-fire proposal from the start. And a top political spokesman told me.

OSAMA HAMDAN, HAMAS SPOKESMAN: It's a joke. It's not politics. It's a joke. Really, it's a joke.

BLITZER: With air strikes underway and Israeli troops and tanks poised at the border, U.N. officials are urging Israel to use maximum restraint in targeting Hamas to prevent casualties and to avoid painfully familiar scenes like these -- homes in ruins and grieving families burying their dead.

(END VIDEO TAPE)

BLITZER: Palestinian health officials now say the death toll in Gaza is 194 people, with at least 1,400 injured.

Our senior international correspondent, Ben Wedeman, is on the scene in Gaza for us.

What are you seeing there tonight -- Ben?

BEN WEDEMAN, CNN CORRESPONDENT: Well, we've seen a variety of strikes, as well as rockets being shot out of Gaza. But what we're hearing, you mentioned those calls being made to Gaza residents. I heard one of those calls in which a voice speaking in Arabic was saying in the name of the Israeli Defense Forces that people in the Shazahiya (ph) neighborhood of Gaza, which is just to the northeast of here, should leave as soon as possible, by Wednesday. And we're being told that already, people are packing up and heading to the center of Gaza, where, in those phone calls, they were advised to go.

The problem is there are already about 17,000 people staying in 20 United Nations schools around Gaza City. They're already packed. So more are on the way.

In addition to those who have been told in Beit Lahia, to the north of here, to come, as well.

So this really is yet another indicator that now that this Egyptian cease-fire attempt has fallen flat, that the possibility of a ground invasion is very much there at the moment -- Wolf.

BLITZER: I know you've spoken with average Palestinians there in Gaza.

What's the feeling on the street to the Hamas rejection of the Egyptian brokered cease-fire?

WEDEMAN: Well, on the one hand, there's disappointment, because people were really hoping that something would come of all this, this bloodshed and this destruction here in Gaza.

But there's an underlying frustration. A lot of people I spoke to said that they want a solution to the problem of Gaza, which didn't begin last week or the week before or a month ago or a year ago. It goes back many years.

People describe Gaza as a big prison. The border to Egypt is closed. The sea is closed by an Israeli sea blockade. They can't go to Israel. They want this problem solved so they can live lives like normal people.

And some liken it to prisoners rioting in their prison -- they want to get out now. They want to be free.

And I can tell you, a few years ago, in January of 2008, Wolf. I was in Gaza when Hamas blew up the wall that separates Gaza and Egypt. Hundreds of thousands of people flooded across that border, not to go stay in Egypt, just to get out, go shopping, see somewhere new, because most people here have never left.

Now, during those few days, not a rocket was fired into Israel. The mosques were empty. People simply feel that if they can just be free to get out of Gaza, maybe that could be a solution, because at the moment, they feel stuck here and this is the result -- Wolf.

BLITZER: Ben Wedeman in Gaza for us.

Ben, thanks very much.

Let's get the Israeli reaction.

Joining us is Mark Regev, the spokesman for Benjamin Netanyahu. And I want you to react what we just heard from Ben, Mark.

But the Israeli Cabinet, the Security Cabinet, meeting in emergency session right now, after midnight. They're meeting in Tel Aviv at the Defense Ministry.

What can you tell us?

What are they considering?

REGEV: Well, today, Hamas closed the diplomatic option. I mean we woke up this morning in the hope that there would be a cease-fire. And as you reported, Israel restrained from all our activities, all action against the terrorists in Gaza, for a full six hours. We gave this cease-fire our full support, as did the U.N. secretary-general, as did the Arab League, as did Palestinian President Abbas.

But Hamas said no to everyone. Hamas said no to the cease-fire both in word and in deed. They -- their spokespeople said we're not interested. And, indeed, they fired some 50 rockets at Israel.

So instead of having this door open to a diplomatic solution, they closed the door. So we now have to, unfortunately, protect our people through military means.

BLITZER: So what does this mean, these leafleting, calling people in Northern Gaza right now, saying evacuate, evacuate, evacuate?

What does that suggest?

REGEV: Well, unfortunately, from that will northern part of the Gaza Strip, we've had a lot of these deadly rocket attacks on the very heart of our country. Those missiles that Hamas is shooting at us come from that specific area. And before we attack, we want to see if we can keep the civilian population out of harm's way and get them out of the area.

BLITZER: So are you speaking about -- is the Cabinet considering limited ground incursions into Northern Gaza?

Is that what we're expecting?

REGEV: Look, I cannot go in -- and you understand, Wolf -- I cannot go into strategic plans that the Cabinet is discussing.

I can say the following. I wish we weren't here. I wish that we had that cease-fire that unfortunately Hamas rejected. And I think the people of Gaza are also angry at Hamas for rejecting the cease-fire proposals of the Egyptians.

I saw tonight a report, Al-Aqsa television, that's the official propaganda arm of Hamas, had to do their own news broadcast, so to speak, showing how the people of Gaza support rejecting of the cease- fire proposal. That just shows, if they think they have to use propaganda on their own people to drum up support, they really do have a problem with their own people. BLITZER: They say they were upset that the Egyptian proposal did not immediately call for some of their -- accept some of their demands, easing the blockade, for example, opening up the borders with Egypt and Israel, allowing some greater trade, if you will.

What do you say to that condition, that they wanted as a gesture?

REGEV: You know, the truth is, the Egyptian proposal was to have an immediate cease-fire and then we would go to Cairo and there would be talks on the details, but to stop the violence straightaway. And Hamas said no.

And in saying no, I think they showed the world exactly who they are. They are a very extreme, violent terrorist organization that isn't interested in trying to find a cease-fire or a solution. They are committed to violent jihad. And, as such, they're the enemies of not only Israel, but of the civilian population of Gaza.

BLITZER: So the diplomatic option, as far as a cease-fire is concerned, has that gone away?

REGEV: Well, Hamas closed the door.

BLITZER: So can it be open -- reopened?

REGEV: I don't know. It will depend a lot on what happens at the moment. We've got missiles raining down on Israel. We had a civilian killed today, as you know. We've had 1,000 missiles over the last few days. And it's got to end. And then the Israeli military is now acting against Hamas, against Hamas' military machine, to protect our people.

BLITZER: What about efforts to revive this cease-fire?

I know Mahmoud Abbas, the Palestinian Authority president, is going to be going to Egypt, talking to the Egyptian leadership. I don't know if the U.S. is even involved. Secretary Kerry was going to go to Cairo, but he's now delayed that trip.

What's going on behind-the-scenes to revive this diplomatic initiative?

REGEV: In the end, we want to come out of this with an -- with a sustained period of peace and security for the Israeli civilian population. We don't want to have those missiles fired from Gaza.

Now, as Prime Minister Netanyahu said yesterday, that can be done diplomatically or that can be done militarily. But one way or another, we will protect our people from those rockets.

BLITZER: Mark Regev, we'll stay in close touch with you.

I know the Security -- the Cabinet is meeting in emergency session in Tel Aviv.

We'll get some results and see what these -- the next steps are going to be.

Mark Regev, thanks very much for joining us.

REGEV: Good to be with you, Wolf.

BLITZER: All right, Mark Regev is the spokesman for the prime minister of Israel, Benjamin Netanyahu.

Coming up live here in Jerusalem, we'll get the other side. My interview with a Hamas spokesman, Osama Hamdan. He's standing by. We'll get the perspective from Hamas. That's coming up.

Plus, the roots of the crisis and growing concern about Israel's young people and extremism.

Brian Todd has been looking into that.

Stay with us.

You're in THE SITUATION ROOM live from Jerusalem.

(COMMERCIAL BREAK)

BLITZER: We're coming to you live from Jerusalem tonight.

And we're following the breaking news -- an emergency meeting of Israel's Security Cabinet underway right now. Once we get some results, we'll, of course, immediately share what we know with you.

All this coming amid renewed fighting after Hamas rejected a proposed cease-fire with Israel.

Let's get reaction now.

Joining us, the Hamas spokesman, Osama Hamdan.

He's joining us from Beirut once again.

Mr. Hamdan, thanks for joining us.

As you know, Israel accepted that Egyptian-sponsored cease-fire, stopped firing their air strikes against Hamas targets for about six hours. Hamas, on the one hand, continued launching rockets into Israel.

Why did you do that?

Why did you reject that cease-fire?

Because, you know, the argument is, you could have saved some Palestinian lives if you would have agreed to the cease-fire.

HAMDAN: Well, I believe we could save the Palestinian lives if the Israelis did not violate the cease-fire which was agreed on in 2012. We could save the Palestinian lives if Netanyahu did not speak like a Nativist (ph) in the last four weeks, when he talked about the certain issue of the three settlers. And that generates the burn of Mohammed Abu Khdeir.

We did not reject the cease-fire. From the first day, we've said we have to go back to the cease-fire and Israel must respect the cease- fire agreement without no -- without regulations. But we said, also, yesterday no one receives a proposal for cease-fire through the media, through a press conference. It was supposed to be delivered to Hamas through the political channels, which did not happen.

We heard in the media that Israel had received the ideas, which was called a proposal, and Hamas did not know that. No other Palestinian organizations know about this.

So the idea simply, there was no proposal in Hamas' hands. We were supposed to discuss the ideas which was published in the media. And everyone knows the things would not work like this.

And I believe someone did that. I don't know if it was a mistake, less of experience or on purpose. And that caused a huge -- a huge mess.

We are still working on the political track. And I believe until now, there are talks between Hamas and the other sides. We hope we can achieve a cease-fire, but a cease-fire which can protect the Palestinians and guarantee that there will be no violations, a cease- fire which can hold for a long time, protecting the Palestinians and give them the chance...

BLITZER: All right...

HAMDAN: -- to live a real life, without being attacked by the Israelis every time.

BLITZER: Are you working with Egypt?

Because Egypt put together that cease-fire proposal. The Israelis accepted it. You told us last night it was a joke.

Are you work -- do you still have confidence that Egypt could be an honest broker between you and Israel and you could work out a cease- fire?

Is that still possible?

HAMDAN: Any broker cannot achieve the target if he was not -- not a neutral broker, if he was not giving the full trust for the two sides. So we are still working with Egypt. We are still talking to other sides, who are talking -- who are talking, also, to the Egyptian side.

And I believe the proposal is supposed to be prepared after both sides agreed on. It is supposed to be published if the two sides give an agreement on it. You can't publish that in the media and then ask everyone to accept that or to reject that. It's not working like this.

As I told you yesterday, it's like putting the cart in front of the horse. You can't do the things like this. We are still working. The talks are still working. Until this moment when I am talking to you, there is talks. And I believe part of the meeting for the Israeli Security Cabinet may be for discussing some new ideas which was introduced by different parties, including Hamas.

BLITZER: Well, that sounds sort of encouraging, Mr. Hamdan, if, in fact, you are now leaving open the opportunity for a cease-fire, even as the Israeli cabinet is meeting.

Can you give us some specifics on what you're hearing, what's going on behind-the-scenes?

HAMDAN: Well, clearly, we are not talking behind the scenes. We are in the scene. But I have to tell you two important points.

The first one, there was old agreements. It's supposed to be respected by all sides. And that was done by Hamas. It's supposed to be done by the Israelis. We are talking now about the guarantees that the achieved cease-fire -- a new cease-fire is supposed to be guaranteed and supposed to be restricted and controlled clearly.

The second point, the cease-fire must open the door for the Palestinians to have a normal life, not only in Gaza, in West Bank, also, because the relations in West Bank are very aggressive. All the parliamentarians were -- more than 20 parliamentarians were arrested the last four weeks. More than 60 Palestinians who were released in the business exchange were arrested another time.

So we have to give the Palestinian people a chance to have at least some normal life.

The third point which we have to talk about it -- and we are discussing that clearly -- this cease-fire must open a chance for politics. It must open a chance for a political solution. You can't destroy the political track, just like what Netanyahu have done with the political process a few weeks ago, and then you can tell the Palestinians it's only a cease-fire and you have to live forever under the occupation.

BLITZER: One final question before I let you go, Mr. Hamdan.

Why not simply stop the launching of rockets, Israel will stop the air strikes and then you go to Cairo, you send a delegation there, you meet and you work out these other major issues, which clearly are on the table, should be on the table?

But why not stop the killing right away first?

HAMDAN: Well, we are not the side who is killing the other side. We are the side who is being killed in 2008, 2012 and now. That happened in 2008 and the Israelis rejected to do anything. That happened in 2012, and the Israelis rejected to open the crossing points. They prevent the fishermen to go through the sea. They closed Gaza, although there was promises that Gaza would be opened.

So we have tried this twice. Unfortunately, Israel is destroying the trust. They are destroying all the trust between them and the Palestinians. So we won't go through the same experience for the third time. We have to agree on everything and then it must be guaranteed, simply because the Israelis, all the time, are (INAUDIBLE) and violating all the agreements.

BLITZER: Osama Hamdan, the spokesman for Hamas, thanks very much for joining us.

We'll check back with you, as we continue our special coverage.

Osama Hamdan joining us from Beirut.

Coming up live, we're here in Jerusalem. There's growing concern about some extremism among Israeli youth. We're learning new details about the killing of a Palestinian teen which helped trigger this current crisis.

Stand by.

And we'll also speak about the peace efforts and why they've failed so far. The former U.S. special envoy for the Israeli-Palestinian peace process, Martin Indyk, he's standing by.

Live.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: We're coming to you live from Jerusalem, where we're monitoring the increasingly deadly fighting that's ongoing between Israel and Hamas.

CNN's Brian Todd has been looking into the roots of this latest conflict and the extremism that may be fueling at least part of what is going on -- Brian, I know you've been speaking with a lot of experts.

What are you finding out?

BRIAN TODD, CNN CORRESPONDENT: Wolf, we're finding serious new concerns tonight about a possible rise in extremism inside Israel. It's pegged to the roots of this conflict, as we learn grizzly new details of the kidnapping and murder of a Palestinian teenager.

(BEGIN VIDEOTAPE)

TODD (voice-over): The suspects were equipped with handcuffs and gasoline and grabbed 16-year-old Palestinian Mohammed Abu Kdheir after they had tried and failed to kidnap an 8-year-old boy. Three young Israelis, all related, were seek revenge for the kidnapping and murders of three Israeli teenagers. A new report from Israel's internal security service says on July 2nd, quote, "For several hours, the kidnappers patrolled Jerusalem Arab neighborhoods trying to find a victim, until they found Mohammed Abu Khdeir. The three Israeli suspects grabbed Khdeir by force, as shown in this surveillance video, took him to a nearby forest, then bludgeoned and burned him to death, according to the report.

Israeli officials say the suspects, who have not been named, admitted to the killing and reenacted it.

MICHAEL OREN, CNN MIDDLE EAST ANALYST, FORMER ISRAELI AMBASSADOR The three Israelis who have been accused of this have a long Well, clearly, of violence. One of them has been declaring legally -- legal insanity.

TODD: Analysts say that incident and the killing of the three Israeli teenagers by Palestinian suspects led to this escalation and the brink of a wider war between Israel and Hamas.

But the murder of the young Palestinian has also sparked a moral debate inside Israel.

ROBERT DANIN, COUNCIL ON FOREIGN RELATIONS: After the killing of Mohammed Abu Khdeir, there's been a tremendous rise of introspection and debate within Israeli society and in the Israeli media.

TODD: Social media fuels the concerns. The anti-Arab tweets from Israelis are plentiful. This apparent Facebook posting after the three Israeli teenagers were murdered shows two girls holding up a sign saying in Hebrew, "Hating Arabs is not racism, it's values. Israel demands revenge."

Analysts say this does not reflect mainstream Israeli views and they don't detect a widespread rise in Jewish extremism but they say the two groups are increasingly isolated from each other.

ANTONY CORDESMAN, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: Over the years, fewer and fewer Israelis and Palestinians actually work and live together. Even when they appear to be side by side, when you visit a beach, for example, being in Israel, you'll see Palestinians and Israelis but they pass each other by without talking.

(END VIDEOTAPE)

TODD: Now among extreme factions it, of course, cuts both ways. There are Arabs like those in Hamas who won't even recognize Israel but one analyst points out polls often show the majority of Israelis and Palestinians want to get along and realize they're going to have to continue living side by side but it only takes a few people, extremists on either side, to do a huge amount of damage. And that's what you've seen here -- Wolf.

BLITZER: Brian Todd with that disturbing report.

Brian, thanks very much. Let's get some more now. Martin Indyk is joining us. He's the former

U.S. special envoy to the Israeli/Palestinian peace talks. Now vice president for Foreign Policy at the Brookings Institution in Washington.

Martin, thanks for joining us. I know you've been very much involved in the effort to revive the peace process. Very frustrating. You stepped down last month as Secretary Kerry's special envoy. Why did you give up?

MARTIN INDYK, FORMER U.S. ENVOY TO ISRAELI-PALESTINIAN TALKS: Well, we haven't given up. By no means. The secretary has made very clear that we're on pause. The president has taken the same position. I stepped down because I was brought in on leave from Brookings to do the negotiations. At the moment, there aren't negotiations but the president and secretary have made clear if we get negotiations again, that they'd like me to come back. And I'd be happy to do that.

But I think that we tried very hard for nine months. And we made some progress in terms of developing bridging ideas. It was a very serious process of negotiations on the final status issues. We drilled down a lot of those issues. We, as I say, managed to generate bridging ideas which we have on the shelf and feel will be useful if we can get negotiations going again. But we just felt that after nine months of effort when we couldn't even in the end get an extension of negotiations agreed between the parties that we needed to step back and see what the parties themselves wanted to do.

It wasn't enough --

BLITZER: You know, Martin --

INDYK: It isn't enough for us to want it. They have to want it, too.

BLITZER: You know, there are some analysts who think that the collapse of the U.S. sponsored effort and it was very intense, almost a dozen visits to the region by Secretary Kerry and you. You spent so much time meeting the Israelis and the Palestinians, but the collapse may have contributed to this current crisis that's under way right now.

Did it contribute? The expectations were high and then they went away?

INDYK: No, I don't believe that's true. I went through that once before in the Clinton administration where our efforts at the end there did contribute to the outbreak of the second intifada because we had raised expectations and then they were disappointed. In this case, expectations were very low. And nobody really expected that we would succeed on either side. And so I don't think there was a factor of disappointment here.

There was violence before beforehand only a few months before the secretary tried to get this negotiation going again and succeeded. We had a Gaza round of violence similar to this one. And he'd repeatedly warned that if we weren't able to make progress, then this is what we were likely to see. And unfortunately, he's been proven right.

What we're witnessing is a chronic conflict with outburst of violence. This is the third time now I think in four years that we've had this kind of horrible violence in Gaza, and it's just the nature of the conflict that we tried very hard to break out of. And we will try again as soon as it becomes possible to do that, as soon as the two sides want to do that. But it gets more and more difficult to do that because of the chronic nature of the conflict that just makes the trust much harder to rebuild and the relationship much harder to build in terms of trying to bridge the gaps and resolve the conflict.

BLITZER: Martin Indyk, let's hope that they can be revived, the peace process, those negotiations, and they can achieve, what you tried to achieve, a two-state solution, Israel living alongside Palestinian. But that's certainly not going to be easy. It looks gloomy, very gloomy as we speak right now.

Martin Indyk, thanks very much for joining us.

Coming up, live from Jerusalem, my interview with the special Middle East envoy, Tony Blair, the former British prime minister. Why does he believe time is running out for peace?

Plus, the severe weather threat. Thunderstorms possible flooding, even tornadoes bearing down on some 30 million people from New York to Washington.

Stay with us. You're in THE SITUATION ROOM live from Jerusalem.

(COMMERCIAL BREAK)

BLITZER: We're coming to you live from Jerusalem where we're following the breaking news. An emergency meeting of the Israeli security cabinet happening right now. It's well past midnight local time. But the fighting here is only part of a wave of deadly unrest sweeping the entire Middle East region.

Our chief national security correspondent Jim Sciutto is joining us now.

Jim, what's happening here in the Middle East, in North Africa? Because most of this region now is on fire.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: No question, Wolf. As you know, there's been a lot of talk of the U.S. disengaging from the Middle East. But we're now covering crises in several countries where the Obama administration has made firm and consequential policy stands, not intervening in Syria, withdrawing U.S. troops from Iraq, participating in regime change in Libya and attempting but failing to engineer a peace agreement in the Middle East. And now today each of those countries for a variety of reasons facing severe turmoil.

(BEGIN VIDEOTAPE)

SCIUTTO (voice-over): In Gaza, hopes for an immediate cease fire today up in smoke. Even before it started.

JOHN KERRY, SECRETARY OF STATE: There are great risks in what is happening there and in the potential of an even greater escalation of violence.

SCIUTTO: It's a statement that could describe an entire region mired in conflict. From Gaza to Libya to Iraq and Syria.

SEN. JOHN MCCAIN (R), ARIZONA: I would argue that given conditions in the Middle East this might be more dangerous than at any time in the past.

SCIUTTO: In Libya, warring militias bombarded Tripoli's airport as the government considers asking for international troops. In Iraq, politicians took a first step towards a new government even as ISIS militants bulldozed barriers along the Iraq/Syria border and celebrated the takeover of Iraqi government buildings. And in neighboring Syria, ISIS is flourishing as the civil war rages on. With the U.N. now urgently sending in humanitarian aid.

This week the White House raised eyebrows seeming to claim broad foreign policy victories in the region.

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: There have been a number of situation from which you've seen this administration intervene in a meaningful way that has substantially furthered American interests and substantially improved that -- you know, the tranquility of the -- of the global community.

SCIUTTO: Today the administration insisted it is engaged diplomatically.

JEN PSAKI, STATE DEPARTMENT SPOKESWOMAN: This is not an administration or a secretary that rests. The fact is there are a range of factors happening in the world that are not caused by the United States but the United States remains engaged in because we care about the stability in the region, as well.

(END VIDEOTAPE)

SCIUTTO: Of course, the other major foreign policy priority for the U.S. in the region are nuclear talks with Iran. They face a deadline for an agreement this Saturday, but it is unlikely to be met. Today Secretary Kerry said the two sides have made, quote, "tangible progress but significant gaps remain."

He's returning to Washington to discuss next steps, including the possible extension of talks and the interim deal, Wolf, possibly for a number of months.

BLITZER: Yes, the turmoil in this part of the world is awful, awful right now.

Jim Sciutto, thanks very much.

Earlier I talked about the crisis here between Israel and Hamas with the former British prime minister, Tony Blair, who is now a special envoy to the Middle East.

(BEGIN VIDEOTAPE)

BLITZER: Is there any light at the end of the tunnel? Because it looks so gloomy as we speak right now.

TONY BLAIR, MIDDLE EAST SPECIAL ENVOY: I think time's running out, frankly. Look, the Egyptian offer is a good offer. It's for a cease fire by both parties. They come to Cairo for negotiations without preconditions and the idea is to put in place a short-term cease fire deal followed by a long-term plan that changes the game on ground in Gaza. And both opens up opportunity for the Gazan people and gives Israel some long-term and permanent security. So it's a tragedy if this opportunity is not taken.

BLITZER: Is this the final word from Hamas? Because the Israelis accepted the Egyptian cease fire proposal. They stopped their airstrikes but after six hours of Hamas shelling into Israel, the Israelis resumed their operations.

Is this a temporary operation that's going on the continued fighting or is Hamas in a day or two or longer going to reconsider?

BLAIR: It's hard to work out what the calculations of Hamas are. But the important thing is that if they really care about the people of Gaza who have suffered terribly over these past days, I mean, almost 200 people that have died, many of them completely innocent people, but this is inevitably going to be the case and they know this if the violence continues.

Now, you know, the Egyptians put toward this offer. I think the Egyptians showed great leadership in doing it. It was a sincere offer to sort the issues out, short and long-term. The Israelis accepted. And I really hope even at this late stage that Hamas understands that it's in the interests of the people of Gaza for this offer to be accepted.

And then we can, you know, work out what is the way we open Gaza back up to the world, change the condition of its people, rebuild it, and unify Palestinian politics on the basis of something that promotes peace and gives Israel their guarantees on security so that rockets aren't fired and terrorism and tunnels helping terrorism so that that's not aimed at Israel.

BLITZER: Why didn't they accept it?

BLAIR: I don't know. I don't know. It's hard to judge what their calculations are at this stage. I think that it's increasingly clear Hamas are going to have to make a choice, maybe they don't want to make it, and the choices, are they genuine Palestinian nationalists, are prepared to accept a two-state solution with a viable and proper state of Palestinian alongside a secure state of Israel or are they part of simply a terrorist movement that wants to kill as many Israelis as possible because they don't accept the right of Israel to exist. BLITZER: Because as you remember, at the end of 2012, the last time

Israel and Hamas were fighting, the then president of Egypt, Mohamed Morsi, did broker a cease fire deal with U.S., your backing. All sorts of other backing. Is there less confidence among Hamas leaders of the current new president of Egypt, Abdul Fatah al-Sisi?

BLAIR: I think overseas there's a much more difficult relationship because President Sisi has made it clear he's against terrorism. He's against the links that were between Hamas or are between Hamas and the Muslim Brotherhood. On the other hand, he's been prepared to put his own leadership out there and say, look, I will in good faith convene a meeting so that both sides, all the issues that Hamas want to put on the table they can put on the table. But in the meantime, the violence stops.

BLITZER: Your main job here is to promote an Israeli-Palestinian peace agreement. You've been working, what, for two, three, four years on this, right?

BLAIR: Six or seven.

BLITZER: Six or seven. Anything at all accomplished? Because when Martin Indyk quit, resigned, and the U.S. effort that Secretary Kerry was so actively involved in, that seemed to collapse. Are we really back to square one? Has anything been achieved at all?

BLAIR: I should think a lot has been achieved in John Kerry's initiative. I think he got a lot of the basic issues to -- what we call the final status issues around territory and security and so on, I think he came along way with that.

BLITZER: Why did it collapse?

BLAIR: I think, ultimately, we've got to understand that now to get peace we're going to have to put the conditions for peace in place. And I think that the crucial thing is this. Whilst Palestinian politics is divided it's very hard for peace to happen. One of the things that could arise out of a deal on Gaza is that we put in place a form of unity for Palestinian politics that actually unites people around a peaceful and not violent means towards a two-state solution.

And the real issue I think is, are Hamas -- is there any hope that they will ever accept that or are they going to remain in an arms struggle where they will kill Israeli different civilians in which case, you know, Palestinian politics then has to be given the opportunity to defeat that politics completely.

BLITZER: Because I don't remember when the entire Middle East, North African region was on fire as it is right now, not only here where we are but certainly take a look at Lebanon and Syria and Iraq, and you go out to Afghanistan, look what's going on in Libya.

Do you remember a region that has exploded as badly as this region has?

BLAIR: Right. It is absolutely exploding. But I think underneath all of it whether it's in Libya, Yemen, Syria, Iraq, or even in Palestinian politics, the central and fundamental question is this -- is the politics of this region going to allow religion to be put in its proper place in politics? The societies to become open minded and tolerant and the economies to be linked and connected to the outside world.

And the real fight that's going on across this region is really one about the modern world. Do you take your place in the modern world where religion's got to have its -- as I say be put in its proper place in the politics of a country and where economies have got to be -- if people are going to educated and connected to the world or do you return to this type of reactionary and regressive politics that puts people against each other and disconnects you from the modern world.

This is -- this is I think the central struggle and in a way the opportunity and the challenge at the moment is that Palestinian politics faces that same struggle.

BLITZER: Mr. Prime Minister, good luck.

BLAIR: Thanks, Wolf. Thank you.

(END VIDEOTAPE)

BLITZER: Much more of our special report live from Jerusalem. That's coming up.

Also, severe weather pounding the U.S. East Coast right now. We'll have the forecast. That's next.

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BLITZER: Much more on our special report in a moment. But first, severe weather pounding the U.S. East Coast right now. Our meteorologist Chad Myers is joining us with the forecast.

What's going on, Chad?

CHAD MYERS, AMS METEOROLOGIST: From Florida to Maine, all the way up the East Coast, Wolf, big cities getting pounded by weather tonight, including D.C., including New York, Philadelphia, all the way up even into Boston. Now things are clearing out along I-95, but still not in the Delmarva, not for New Jersey. Hundreds and hundreds of flights have been canceled today. Thousands of people not going to get to their destinations because of the severe weather rolling up the East Coast at this hour -- Wolf.

BLITZER: Pretty bad.

All right, Chad, thanks very much.

Much more of our special report, live from Jerusalem coming up right at the top of the hour.

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